Hot water is 19.3% of what your house burns through.
Second only to heating. Here is what separates tank, tankless and heat pump units when you are choosing a water heater in Orillia.
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Quick answer
Choosing a water heater comes down to three types. A storage tank keeps water hot at all times. A tankless unit heats only on demand and saves space. A heat pump model pulls heat from the surrounding air. Each suits a different household, and the cheapest to run is not always the right fit.
Key takeaways
- Water heating is 19.3% of the energy used in an average Canadian home, second only to space heating.
- A storage tank uses energy even when nobody is drawing hot water, because it keeps the tank hot around the clock.
- ENERGY STAR tankless units can save 30% more energy than standard storage tanks, but struggle with several draws at once.
- Heat pump water heaters save up to 50% over standard electric, yet Natural Resources Canada calls them most cost-effective in mild climates.
- Match the unit to how your household actually uses hot water, not to the biggest number on the label.
What are the options when choosing a water heater?
Three types cover almost every Ontario home. The storage tank is the most common in Canada and keeps a reservoir hot and ready. The tankless or on-demand unit heats water as it flows through, which saves floor space. The heat pump water heater draws warmth from the air around it, usually in a basement or utility room.
Solar is a fourth option, though Natural Resources Canada describes Canadian systems as supplying roughly 60% of a home's hot water, usually as a preheat ahead of a conventional backup. It rarely stands alone here.
How much does hot water actually cost you?
More than most homeowners assume. Natural Resources Canada puts water heaters at 19.3% of the total energy used in the average Canadian household. That makes the water heater the second-highest energy consumer in the home, behind total space heating and ahead of everything else you plug in.
That figure is the reason this decision deserves an hour of thought. A furnace choice gets weeks of research and a water heater often gets replaced in an afternoon, by whoever can come fastest, with whatever is on the truck.
Where does a storage tank lose energy?
In the waiting. A tank holds hot water ready for whenever you want it, which means the burner or element fires to keep that water hot even when nobody is drawing any. Natural Resources Canada puts it plainly: the heater is consuming energy even when you are not using hot water.
A cheap improvement either way
Natural Resources Canada suggests insulating the hot and cold pipes within two to three metres of the heater. It costs very little and it applies whether you keep the tank or replace it. An ENERGY STAR certified gas storage model also cuts energy use by 9% compared with a standard gas storage unit.
What does tankless really save?
Natural Resources Canada states that ENERGY STAR certified tankless models can save 30% more energy than standard storage tank types. The saving comes from removing the standby problem entirely. There is no reservoir sitting hot, so an empty house costs nothing to keep supplied.
The trade-off is simultaneous demand. Natural Resources Canada notes that tankless units can struggle when several hot water uses run at once, which makes them a better fit for households where peak demand is modest. A dishwasher, a shower and a laundry load together is the scenario to size for.
Is a heat pump water heater right for a Simcoe County winter?
This is where the honest answer differs from the rebate brochure. Natural Resources Canada says ENERGY STAR heat pump water heaters use up to 50% less energy on average than standard electric models. It also adds two cautions. They are less useful in winter when space heating is needed, and they are most cost-effective in mild climates.
The reason is mechanical. The unit makes hot water by taking heat out of the air around it. In a basement in January, that means cooling a space your furnace is working to warm. In July it does the opposite and reduces the air conditioning load, which is a genuine benefit.
None of that rules it out. It does mean the payback calculation has to account for where the unit sits and how cold that space gets. That is a conversation to have before the order, not after.
| Storage tank | Tankless | Heat pump | |
|---|---|---|---|
| How it heats | Keeps a reservoir hot | Heats as water flows | Moves heat from surrounding air |
| Energy, per NRCan | ENERGY STAR gas model uses 9% less than standard gas storage | ENERGY STAR model saves 30% more than standard storage | ENERGY STAR model uses up to 50% less than standard electric |
| Energy used when idle | Yes, continuously | None | Minimal |
| Simultaneous demand | Good until the tank runs out | Can struggle | Good until the tank runs out |
| Space | Takes floor space | Wall-mounted, frees floor space | Needs air volume around it |
| Cold-climate note | No issue | No issue | Less useful in winter; best in mild climates |
| Best for | Households wanting hot water always available | Modest simultaneous demand, tight spaces, homes left empty for stretches | Households where the unit sits in a space that stays warm year-round |
What we see in Orillia homes
Two housing patterns, two different answers
Orillia sits where Lake Simcoe meets Lake Couchiching, and the water shapes the housing in ways that reach the basement. Properties along the shoreline include a good share of seasonal and part-time homes, and standby loss is at its most wasteful in a house nobody is living in. A tank keeps itself hot through every week the owners are not there.
The downtown core runs the other way. Century homes and heritage properties often have mechanical rooms that were never designed for modern equipment, and floor space is the binding constraint rather than efficiency. A wall-mounted tankless unit frees a footprint that a tank cannot give back.
Then there is the household itself. A family of five with one bathroom and a morning rush is a different sizing problem from a retired couple. That difference matters more for a tankless unit than for a tank. We ask about the morning peak before recommending anything, because that is the number the unit has to meet.
Aire One Barrie serves Orillia, Barrie, Oro-Medonte, Shanty Bay and the rest of Simcoe County. The Orillia heating and cooling page has the full service list, and water heaters covers what we fit.
Safety first
A gas water heater is a fuel-burning appliance, which means Ontario's carbon monoxide alarm rules apply to your home. Those rules changed in January 2026 and most homes now need more alarms than they have.
If a carbon monoxide alarm sounds: get everyone outside into fresh air, then call 911 from outside.
If you smell a rotten egg or sulphur odour: leave the area immediately. From a safe distance, such as a neighbour's home, call the Enbridge Gas 24-hour emergency line at 1-866-763-5427 or 911.
Do not relight a pilot, adjust a gas valve, or alter venting yourself. Water heater installation and venting is licensed work.
How should you decide?
Start with your household rather than the efficiency table. Count the fixtures that run at the same time on a normal morning. Note whether the house sits empty for stretches. Measure the space the current unit occupies and what you would do with it. Those three answers point at one of the three types more reliably than any rating does.
How Aire One answers this
Aire One has served Ontario since 1990 with licensed technicians, free detailed estimates that give you the price before work starts, 24/7 emergency service and a 100% satisfaction guarantee. If you would rather spread the cost, there are buy or finance options on water heaters.
The short version
Water heating is nearly a fifth of your home's energy, so choosing a water heater deserves more than a same-day swap. Tankless wins on standby waste and space. A tank wins on simultaneous demand. A heat pump model wins on paper and needs a closer look in a Simcoe County winter.
Talk to Aire One Barrie
Licensed technicians, free detailed estimates with the price before work starts, and 24/7 emergency service across Orillia and Simcoe County. Water heaters, furnaces, boilers, heat pumps, air conditioners and indoor air quality.
- Carrier Factory Authorized Dealer — Comfort, Performance and Infinity series
- Buy or finance options on water heaters
- 100% satisfaction guarantee
Frequently asked questions
How much of my energy bill is hot water?
More than most people expect. Natural Resources Canada puts water heaters at 19.3% of the total energy used in the average Canadian household, which makes them the second-highest energy consumer in the home after space heating. That is why the choice is worth more thought than it usually gets.
Is a tankless water heater always cheaper to run than a tank?
Not always, but usually. Natural Resources Canada states that ENERGY STAR certified tankless models can save 30% more energy than standard storage tank types. The saving comes from not keeping a tank of water hot around the clock. A household with heavy simultaneous demand may not see the full benefit.
Can a tankless water heater run two showers at once?
Sometimes, depending on the unit's capacity and the incoming water temperature. Natural Resources Canada notes that tankless units can struggle when several hot water uses run at the same time, so they suit homes where simultaneous demand is modest. Sizing for your actual peak matters more than the brochure flow rate.
Is a heat pump water heater a good idea in Simcoe County?
It needs thought. Natural Resources Canada says ENERGY STAR heat pump water heaters use up to 50% less energy than standard electric models. It also notes they are less useful in winter when space heating is needed, and most cost-effective in mild climates. They pull heat from the surrounding air, so in a cold basement in January that heat has to come from somewhere.
Does the Home Renovation Savings program cover water heaters?
It lists a rebate for heat pump water heaters as a bundled upgrade, and the equipment must be an ENERGY STAR certified model. Rebate amounts and rules change, so confirm the current figures on the program site before you commit to anything.
Sources
- Natural Resources Canada — Guide to residential water heaters (figures checked October 19, 2026)
- Natural Resources Canada — ENERGY STAR Canada
- Save on Energy — Home Renovation Savings Program
- Technical Standards and Safety Authority — Ontario Fire Code CO alarm requirements
- Enbridge Gas — Ontario emergency contact and gas leak instructions
